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The United States and China signed their phase-one trade deal in January 2020. Photo: EPA-EFE

China revamps trade negotiation team ahead of possible fresh talks with Biden administration

  • China’s Ministry of Commerce reshuffle lays out new trade team that would work directly with the United States, and in other international forums
  • Joe Biden said last month that he will maintain current trade tariffs on China and make no immediate changes to the phase-one deal signed a year ago

Beijing reshuffled its trade negotiation team ahead of Joe Biden’s presidential inauguration, in the latest sign China is preparing for a possible resumption of bilateral trade talks with the United States.

Despite the damage done to bilateral relations in the past four years – including the trade war, finger-pointing over the origin of coronavirus pandemic, US efforts at technological containment, and confrontations over issues such as Hong Kong’s national security law and alleged genocide in Xinjiang – analysts believe a pragmatic and rule-respecting Biden administration will soon resume contact with Beijing and eventually return to the negotiating table.
The latest personnel adjustment came at the Ministry of Commerce, a core part of China’s trade negotiation team. Last week, Vice-Minister Yu Jianhua, 60, was appointed chief international trade negotiator – a position that has been vacant since Fu Ziying left the role amid the trade war in late 2018.
Commerce Vice-Minister Zhang Xiangchen has also been named deputy international trade negotiator. He, along with Yu and Vice-Minister Wang Shouwen, will be heading the office of international trade negotiations under the Ministry of Commerce. Wang Wentao, 56, was named the new commerce minister last month.

“China needs experienced officials to enhance its strength in negotiations,” particularly in terms of setting rules in international forums, deals and reforms, said Zhang Monan, lead researcher with the Department of American and European Studies at the China Centre for International Economic Exchanges, a Beijing-based think tank.

“[China] is now taking the initiative, rather than responding passively. [The appointments] are not only for China-US talks, but also for the development of multilateral rules.”

The priority for talks with the US will be normalising economic and trade ties, with the focus on high standards and rule implementation, Zhang said.

This approach would mark a major difference from the Trump era, when quarrels over the bilateral trade imbalance spilled over into technology, finance, human rights, national security and Taiwan, with “big stick” and tit-for-tat policies being deployed.

“We tend to believe that the Biden administration will continue to implement the phase-one deal signed a year ago,” Zhang Monan said. “The most urgent thing is to resume trust-building contacts and gradually reopen talks.”

In recent months, Beijing has made significant progress on its international agenda, from President Xi Jinping promising that China will be carbon-neutral by 2060, to the signing of the 15-member Regional Comprehensive Economic Partnership and the conclusion of China-EU Comprehensive Agreement on Investment. Beijing has also expressed strong interest in joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which the US helped draft but pulled out of in 2017.

“Many structural issues such as market access and [government aid to] state-owned enterprises shouldn’t be insurmountable barriers between China and the United States,” Zhang Monan added.

Wang Yiwei, a professor of international relations at Renmin University of China, said that the new trade-negotiator appointments are a sign of goodwill and an olive branch extended to Washington.

“China has already made plentiful preparations,” he said. “Meanwhile, the Biden administration needs to cooperate with China in areas such as pandemic control and climate change.”

In the past year, Beijing has tried to avoid the worst-case scenarios of a new cold war and a decoupling of the world’s two largest economies. It switched to a self-reliant economic-growth strategy, and made security issues – including that of the supply chain, key technologies, finance and food – as important as economic development.
Biden said last month that he will maintain current trade tariffs on China and make no immediate changes to the phase-one deal signed a year ago while his administration develops a strategy plan on China relations that will include working more closely with allies.

His China policy team has largely been formed, including Antony Blinken as secretary of state, Jake Sullivan as national security adviser, trade representative Katherine Tai and senior China director Laura Rosenberger. Obama-administration veteran Kurt Campbell will be Biden’s White House coordinator for the Indo-Pacific region.

But in the first part of his presidency, Biden is expected to focus his attention on domestic issues, particularly controlling the widespread coronavirus outbreak and enacting policies to support the economy, such as his US$1.9 trillion rescue plan unveiled last week. At least initially, engagement with China is likely to take a back seat.

“It makes no sense for [Biden’s team] to quickly engage with China directly. Their domestic agenda is urgent and broad, while negotiating with China is a political liability,” said Derek Scissors, a fellow with the American Enterprise Institute.

“Quiet, lower-level talks can start when the US personnel are in place, but the more attention they get, the worse it will be for Biden right now,” he said.

Ding Yifan, a senior researcher with the Development Research Centre of the State Council, said that Biden’s proposed US$1.9 trillion stimulus package and personnel appointments reflect the mindset of “competing with China in a Chinese way”.

Washington could anchor bilateral trade relations on improving domestic jobs and welfare, rather than advancing a trade-confrontation strategy to facilitate the market expansion of multinational companies in China, Ding told Tencent’s capital market seminar on Monday,

Robert Rogowsky, who heads the international trade and economic diplomacy programme at the Middlebury Institute of International Studies, said it would be wise to re-establish thoughtful and productive dialogue with China immediately.

Biden may put 5G technology, a re-evaluation of trade war, and restarting bilateral investment negotiations higher on his China agenda, and will focus mostly on trade-policy enforcement and compliance issues, Rogowsky predicted.

However, Trump’s trade war will not be wound down quickly. “I suspect each step in unravelling it will be negotiated, and concessions are expected,” he said.

This article appeared in the South China Morning Post print edition as: Beijing shuffles trade team in readiness for US talks
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